Eurozone to Portugal: Sacrifice yourself to save Spain

M

MrFunkyBoogaloo

EUobserver said:
Portugal has been told to apply for a rescue from the EU bail-out fund lest Spain be sucked into the vortex, according to reports in German media.

The European Central Bank and a majority of member states in the eurozone are laying heavy pressure on the narrow Iberian nation to be the third country to tap the European Financial Stability Facility, according to a report based on unnamed sources in the Financial Times Deutschland.

European leaders and a number of analysts fear that should Portugal default, Spain too would be dragged down. While the debts of Greece, Ireland and Portugal are thought to so far be manageable, Spain would empty the eurozone's emergency piggy bank. http://euobserver.com/9/31362
EUobserver said:
EU leaders insisted that a report that heavy pressure was being applied to Portugal to apply for financial assistance from a eurozone bail-out fund was false.

"It's absolutely, completely false - every reference for an aid plan for this country," said European Commission President Jose Manuel Barroso, speaking to reporters at an OECD conference in Paris. [...] The office of the Portuguese prime minister, Jose Socrates, echoed Mr Barroso's words, saying that the report was "totally false". EUobserver / Portugal 'absolutely' not under pressure, say leaders
Sound familiar?
 


'orebel

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Déja Voodoo Economics
 

NYCKY

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Portugal getting a bailout won't save Spain. This is more nonsense. If Spain has fundamental problems (which it does) bailing out other countries won't stop it.

Just my opinion but I think Portugal will announce a bailout next week (the IMF/EU are probably already there) and I think Spain will follow shortly thereafter, they maybe able to put it off til next year but it will be in Q1.

These bailouts are like scarlet letters and its time for countries to stand up and default. Ordinarily I would never suggest a default but I think Merkel needs to be told to bailout her own banks. A lot of the problems are stemming from the German bank exposure to other European banks. She makes it sound like German taxpayers are bailing out Greek/Irish/Portuguese banks when in reality its just as much the other way around.
 

NunoF

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Portugal getting a bailout won't save Spain. This is more nonsense. If Spain has fundamental problems (which it does) bailing out other countries won't stop it.

Just my opinion but I think Portugal will announce a bailout next week (the IMF/EU are probably already there) and I think Spain will follow shortly thereafter, they maybe able to put it off til next year but it will be in Q1.

These bailouts are like scarlet letters and its time for countries to stand up and default. Ordinarily I would never suggest a default but I think Merkel needs to be told to bailout her own banks. A lot of the problems are stemming from the German bank exposure to other European banks. She makes it sound like German taxpayers are bailing out Greek/Irish/Portuguese banks when in reality its just as much the other way around.
They will probably make it beyond next week, but they will need the bailout before the large maturing debt repayments hit them next March.

Portugal's problem is not the really banks. The banks are getting into problems due to the inability of the state to cut expenditure, which is affecting the bank's financing capacity in the markets.

It's the opposed situation to Ireland, where the banks dragged everyone else down.
 


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